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China iron ore futures hit near eight-month high as stockpiles fall

China iron ore futures hit near eight-month high as stockpiles fall

MANILA :Chinese iron ore futures climbed to their highest in almost eight months on Monday, supported by firm demand for the steelmaking raw material in the world’s top consumer as stockpiles at its ports dropped last week.

Inventories of iron ore at China’s major ports fell 150,000 tonnes from the previous week to 143.85 million tonnes on Friday, data compiled by the SteelHome consultancy showed.

The port stocks have dropped 11 percent since hitting a record-high of 161.98 million tonnes in June.

The most-traded January iron ore on the Dalian Commodity Exchange rose as far as 546.50 yuan ($78.57) a tonne, its loftiest since March 5. It closed up 0.7 percent at 538 yuan a tonne.

“Steel production remains high and the use of iron ore is very high,” said an iron ore trader in China’s port city of Rizhao.

China’s daily crude steel output rose to a record 2.7 million tonnes in September as mills in the world’s top producer chased strong profit margins before the start of winter production curbs aimed at tackling smog.

But this year’s restrictions are expected to be more lenient than during the winter of 2017 after China allowed local governments to set their own production limits instead of implementing blanket curbs.